These significant changes, which apply retroactively to 2013 and broaden certain definitions under the PST rules, specifically address the B.C. Supreme Court’s comments in a recent 2023 decision that found that certain specific cloud computing services and online chat technical support services were not subject to PST. The new rules also feature new non-compliance penalties, including for third-party providers.
Although these changes were expected, software and cloud computing businesses may be surprised to see the extensive scope of British Columbia's new rules, especially given their retroactive application. Businesses that may have applied the previous PST legislation to determine the tax status of some of their digital products and services should review these changes to understand how they may affect their position on cloud services or other digital products. In particular, these businesses, including suppliers and purchasers, will have to determine whether they may face a tax liability for past years now that these changes are enacted.
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